Real estate portals around the world have been trying to diversify their revenue streams for years – with mixed results – but one portal’s efforts stand out as a success.

Why it matters: Leading German portal Scout24’s consumer subscription product is a rare example of a new revenue stream that’s undoubtedly working – and a novel offering that directly targets consumers.

• In addition to consumer subscriptions, Scout24 offers the usual suspects of adjacent revenue streams, mortgages and seller leads, neither of which are growing.

Scout24’s consumer subscription business offers property buyers and renters (pictured below) an enhanced experience, including early access to listings and priority messaging, for a monthly fee.
 

The product is resonating with consumers in a meaningful way; revenue is up 20 percent year-over-year and it will generate over €60 million for the year.

Growth is being driven by a steady increase in subscribers; Scout24 has likely passed the 400,000 paying subscriber mark.

• Average subscription revenue is around €16 per month, with a 3 month minimum term. 

Context: The consumer subscription business represents a substantial 14 percent of Scout24’s total revenue.

• Compare that to mortgage, which, like efforts at Zillow and REA Group, accounts for about four percent of total revenue.

The bottom line: Successfully diversifying revenue streams in a meaningful way is hard, especially for real estate portals.

• While most portals have focused on the false promise of mortgages – the siren song that has lured so many – Scout24 has built a valuable subscription business that directly targets consumers.

• Yes, but: Just because a consumer subscription product is working in Germany doesn’t mean it will work in other markets!